Opinion
99 C 400
March 12, 2002
ORDER
I have before me Local 134 IBEW's ("Local 134") motion to dismiss plaintiffs' Second Amended Complaint [77-1] to which Mike Fitzgerald, Business Manager of Local 134, has joined [76-1]. Defendant Unified Social Club ("Unified") has also filed a motion to dismiss the complaint [79-1], which I will consider with Local 134's motion, since in lieu of responding directly to Unified, plaintiffs oppose the motion on the same grounds as in their response to Local 134's motion [98-1]. Defendants Larry Crawley, Bob Parrilli, Mike Caddigan, Charles Dunne, Marty Moylan, and Ed Buettner ("The Crawley defendants") have also filed a motion to dismiss the complaint [81-1], which I will discuss separately. Finally, plaintiffs have filed a motion for interim attorneys' fees [9 5-1], which I will address below as well.
This action began in January 1999, as a Labor Management Relations Act, 1947, § 302 claim against Local 134, Mr. Fitzgerald, and Unified. Plaintiffs' Second Amended Complaint now asks for relief under 29 U.S.C. § 501. A motion to dismiss is appropriate when it is demonstrated "beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). For the purpose of this motion, I must construe the complaint in the light most favorable to the plaintiffs and accept all facts alleged by plaintiffs as true. See Hishon v. King Spaulding, 467 U.S. 69, 73 (1984).
Local 134 and Mr. Fitzgerald move to dismiss on a number of grounds. Since plaintiffs clarify that Count I of the First Amended Complaint was included for archival purposes only, the "law of the case" argument is no longer at issue here. I am rejecting Local 134 and Mr. Fitzgerald's argument based on res judicata, because none of the plaintiffs were parties to the litigation involving the United States and that action was not based on § 501. I am also rejecting the statute of limitations and laches defenses since I have already considered and rejected them in granting plaintiffs' application to file the Second Amended Complaint. Similarly, this case was remanded to this court so that I could exercise my discretion over whether to bar plaintiffs' amendment to their complaint be cause of undue delay, and my allowing the amendment indicates my rejection of this defense also. What remains is whether Local 134 is a proper party to the cause of action in Count IV of the Second Amended Complaint. Plaintiffs assert that they wish to keep Local 134 as a defendant in this case only for purposes of accounting and enforcement of the permanent injunction that I granted in 1999 [42-1]. I will allow Local 134 to remain as a defendant in this action solely for these purposes and dismiss all damage claims against it. With respect to the Title V claim in Count IV, there is no doubt that a vast majority of the expenses incurred were incidental to Mr. Fitzgerald, and I believe that there are better uses of the parties' time than attempting to determine how much of the legal fees paid by Local 134 can be attributed to Mr. Fitzgerald's defense, and this is especially true with regard to Mr. Fitzgerald's future expenditures, which are even more tenuous. Also, I do not think that Mr. Fitzgerald's joining Local 134's motion to dismiss makes it apparent that Local 134 is funding his defense; rather, it appear s that Mr. Fitzgerald decided to piggyback onto Local 134's defense, and it could be left to discovery how much Mr. Fitzgerald pa id out of his pocket to examine and join Local 134's motion to dismiss. Thus, Local 134 will only be liable for any necessary equitable relief should it be granted. Be cause Unified's motion to dismiss was essentially joined with Local 134's motion, I will also allow Unified to remain a defendant in this action solely for equitable purposes.
The Crawley defendants move to dismiss on the ground that plaintiffs have failed to meet one of the conditions precedent to filing a § 501(b) action, namely the requirement that the labor organization, its governing board, or its officers must refuse or fail to sue, recover relief, secure an accounting or other appropriate relief within a reasonable time before a member of the organization may do so directly. While I tend to agree with the Crawley defendants' argument that their addition as defendants at this point suggests that they were insufficiently identified in Mr. Chathas' correspondence with Don Hermanson, the Chairman of Local 134's Executive Board, this failure is excused on the basis of futility. In McNamara v. Johnston, 522 F.2d 1157, 1162-63 (7th Cir. 1975), the Seventh Circuit excused the plaintiffs' failure to make an analogous demand for relief because the request would have been futile. Considering the ties between Unified and Local 134, it was not surprising that the Board would refuse to sue (as noted by the Seventh Circuit in Chathas v. Local 134 IBEW, 233 F.3d 508, 514 (7th Cir. 2000)), and since the Crawley defendants were officers of Unified, the expected outcome of a request for action would be the same. Because this requirement under § 501(b) is excused, the absence of plaintiffs McGuire, Hastings, Hickey, and Pitlock in Mr. Chathas' correspondence with M r. Hermanson does not defeat their standing in this action. For these reasons, I am denying the Crawley defendants' motion to dismiss. With respect to the Crawley defendants' liability for attorneys' fee s to date however, I find that because they were not named defendants in this action until the present time, they are not liable for these fees. Although I excuse plaintiff s' failure to name each Crawley defendant for purposes of the § 501 action, that does not change the fact that the Crawley defendants were not put on notice that they were defendants to this action until the filing of the Second Amended Complaint. Thus, in the interest of fairness, I cannot find that they are liable for attorneys' fees prior to that time and dismiss plaintiffs' claims for these fees.
Finally, plaintiffs have requested reimbursement of interim attorneys' fees and costs from Local 134. Plaintiffs argue that be cause the injunction forbids defend ants to solicit or receive contributions to Unified from employers doing business with Local 134, a benefit has been conferred upon Local 134's members, and plaintiffs should be reimbursed for the legal expenses incurred in bringing about the injunction. Although Local 134 grossly mischaracterizes the "magnanimous" nature of defendants' offer to make the injunction permanent, I find that plaintiffs are not entitled to this reimbursement. Plaintiffs vehemently objected to defendants' offer and demonstrated their dissatisfaction with the in junction by appealing to the Seventh Circuit without avail. Now, to obtain their desired result, plaintiffs have amended their complaint to include another cause of action, which they are entitled to do. I do not find that plaintiffs are entitled to reimbursement for incurred legal costs that helped bring about a result that they so clearly oppose, even if that result ultimately benefits Local 134 and its members. Also, I find that plaintiffs' request for fees involved with their Title V claim is inappropriate. All that has been decided at this point is that plaintiffs can file their Second Amended Complaint, which adds the Title V claim. This by itself does not constitute what plaintiffs describe as "an enormous common benefit on all Local 134 members."
For the reasons discussed above, Local 134, Unified, and Mr. Fitzgerald's motion to dismiss is granted in part and denied in part. All damages claims against Local 134 and Unified are dismissed, and Local 134 and Unified will remain defend ants to this action solely for equitable purposes. The Crawley defendants' motion to dismiss is denied, but plaintiffs' claims for attorneys' fees to date are dismissed. Finally, plaintiffs' motion for interim attorneys' fees is denied.
Because Local 134 and Unified remain defendants in this case for accounting purposes, I grant plaintiffs' motion for Rule 26(f) conference and other discovery.